Stocks to watch: GPG sacking of Gibbs 'unusual'

Tuesday 6th July 2010

GPG's sacking of its director Tony Gibbs has been called "unusual" by ASB Securities, NZO drops its forecast output for the next year, while NZX shares rose yesterday after it announced it was buying back some of its stock.

Guinness Peat Group (GPG): The investment group’s sacking of director Tony Gibbs was somewhat unusual as his restructuring plan was simply to do what chairman Ron Brierley has been promising to do for two years, said ASB Securities analyst Florian Burch in ShareChat. “Going by the shape of the board’s initial proposal and by the reasons it gave for dismissing Mr Gibbs’ proposal, it now appears the chairman’s promises bore little chance of being kept in a foreseeable timeframe,” he said. Gibbs has at least achieved partial success with the board deciding to appoint three independent directors to lead the restructuring Burch said. Its shares were unchanged yesterday at 65 cents.

New Zealand Oil & Gas (NZO): The energy exploration and production company announced yesterday that production from the Tui oilfield is forecast to drop two million barrels to 2.8 mmb's in the year ended June 30, 2011. Output would be cut by 300,000 barrels because of an extended shut-down at the Pateke-3H well, it said. The shares fell 0.8% yesterday to $1.23.

NZX (NZX): The value of trading on the NZX dropped 24% last month, while total trades declined 18%. Year to date, some $610 million of new equity was raised and $1.18 billion of debt, according to the NZX’s latest monthly operating data. The stock rose 10 cents to $1.56 yesterday, when the company announced a buyback of 2.9% of its stock, saying the company is undervalued, and a decision to pay dividends every six months rather than annually.

Pike River Coal (PRC): The coal miner climbed 3.5% to 89 cents yesterday after Banpu, Thailand’s biggest coal producer, agreed to acquire the rest of Australia’s Centennial Coal for A$2 billion. The deal put a 40% premium on Centennial, which was creating interest in Pike, said Grant Williamson, a director at Hamilton Hindin Greene.

Pyne Gould (PGC): The company’s cornerstone investor, George Kerr, raised $150 million for Torchlight Fund No.1 LP, a fund that will seek opportunities in the wake of banks restricting credit to businesses and individuals. The fund could rise by a further $20 million following reserved allocations. The shares rose 5.3% to 40 cents yesterday.

Southern Travel Holdings (STH): The travel booking company yesterday announced the appointment of Saumil Kapadia as chief financial officer and company secretary effective July 5. The shares last traded at 10 cents on May 18.

New Image Group (NEW): The manufacturer of colostrum-based health tonics said yesterday that sales dropped 17% last financial year, mainly reflecting the impact of a strong kiwi dollar. It predicts a pick-up in 2011 sales on demand from Asia. Unaudited revenue was $81.7 million in the 12 months through June 30, down from $98.1 million a year earlier, it said. The shares last traded on July 1 at 31 cents.

Themes of the day: The Quarterly Survey of Business Opinion is out this morning, providing a clue to companies' hiring and investment intentions and price expectations. Wall Street was closed on Monday for the Independence Day holiday, setting a subdued tone for the domestic market. NZX data today showed both trading volumes and value on the bourse fell last month.

Businesswire.co.nz

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